Dorian LPG Minor model adjustments
We have updated our estimates, reflecting the Q2 report, Q3 QTD fixtures and other minor adjustments. We remain positive on the outlook for the VLGC market, with upside potential to current rates on a still-healthy USD120k/day arbitrage and limited 3% supply growth in 2025e. The current ‘irregular’ DPS of USD1.0 equates to a healthy 14% run-rate dividend yield, with further upside potential if shipowners’ share of the arbitrage returns to historical levels. Applying the current USD60k/day arbitrage over the next four quarters as spot rates, we calculate a 20% earnings yield. We do not consider our estimate changes to be material, and we have not changed our BUY recommendation. We reiterate our USD40 target price.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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